Tax policy will be front and center for the next administration and Congress, given that individual rate cuts from the Tax Cuts and Jobs Act (TCJA) of 2017 are currently set to sunset at the end of 2025. The act made substantial changes to the tax code, including expanding tax brackets, lowering the top tax rate, increasing the standard deduction, eliminating personal exemptions, capping the mortgage interest and state and local tax (SALT) deductions, as well as increasing the federal gift and estate tax exemption.
President-elect Donald Trump’s Republican victory could give him the upper hand in driving his agenda through Congress. Here's a look at what was proposed on the campaign trail.
President-elect Trump's tax platform
President-elect Donald Trump has expressed support for extending the income tax provisions that are part of the TCJA, and has made certain additional proposals on the campaign trail.
Income taxes. Trump has expressed support for extending the income tax provisions of the TCJA, perhaps on a short-term basis as Congress debates a larger tax-reform package. That could mean federal tax brackets would stay where they are today, with a top marginal rate of 37%. The SALT deduction cap and elimination of personal exemptions might also be reconsidered as part of congressional negotiations.
Qualified dividends and capital gains rates. The TCJA lowered taxes on long-term capital gains by setting up separate tax brackets for assets held longer than 1 year and for qualifying dividends, though the rates remained the same at 0%, 15%, and 20%. The TCJA also retained the 3.8% net investment income tax, or NIIT, for higher-income people. There has been some discussion among Republican tax policy experts about making the top rate 15% and eliminating the NIIT.
| 2024 capital gains tax rates | ||||
| Single (taxable income) | Married filing separately (taxable income) | Head of household (taxable income) | Married filing jointly (taxable income) | |
| 0% | Up to $47,025 | Up to $47,025 | Up to $63,000 | Up to $94,050 |
| 15% | $47,026 to $518,900 | $47,026 to $291,850 | $63,001 to $551,350 | $94,051 to $583,750 |
| 20% | Over $518,900 | Over $291,850 | Over $551,350 | Over $583,750 |
Child Tax Credit. Vice President-elect JD Vance has expressed support for increasing the credit to $5,000 per child.
Caregiver credit. In a speech at Madison Square Garden in October, Trump proposed a new tax credit for family caregivers taking care of a parent or loved one.
Estate taxes. Trump has expressed support for extending and making permanent the 2017 TCJA changes to the estate tax exemption, which doubled to their existing levels of $13.61 million for single people and $27.22 million for couples compared to 2016.
Without an extension, the estate tax would return to its pre-2017 levels of $5.5 million for single people, and $11.1 for married couples.
Social Security benefits. Trump has proposed eliminating all taxes on Social Security benefits. Currently up to 85% of benefits is taxed for a single filer with income above $34,000 or a married filing jointly couple with combined income of $44,000. (Below these thresholds a smaller percentage of benefits is taxed, or not taxed at all.)
Corporate taxes. Trump has expressed support for lowering corporate taxes to 15% from their current 21% rate.
Focus on your plan
The final outcome of next year’s tax debate will hinge on many factors, including the priorities of the new Congress and how policymakers address the record-high federal debt and deficits. Remember to stay engaged and plan for a variety of tax scenarios. Also, everyone's financial situation is different. Consider speaking with a financial or tax professional about your individual needs.